so i mean, it makes us tougher and stronger. i always tell people when it's bad, it's still good, because you're learning the most, the best investment opportunities, the worst days in the market are where we made the most money long term. >> i wonder how long it takes this time to recondition people into thinking it's good to be a buy and hold or be in the stock market. >> normally people say memories are short, but this is taking a long time. i think it's like a ptsd. it's like we have flashbacks. >> andrew picks up the nightmare stuff. remember that. >> i'm remembering that. you can get one, too. >> yes, it's been great having you. it's been fun. you'll come back? >> i hope so. we've been watching otherwise prices by the way, the news has been pushing oil prices

higher, up about 70% above $94.9 0. you can keep an eye on it about "squawk on the street." join us tomorrow. right howard here's "squawk on the street" ♪ let's do it good thursday morning. i'm carl kquintanilla. jobless claims did come in stronger than expected. got blowout housing starts. meantime, europe is trying to find some direction after a decent spanish bond offering and good numbers from retailer. the first grounding of a major commercial jet in this country since 1979. is boeing's dreamliner safety to fly. how much work will it take to make it right? bank of america and citi's earns are messy, does it justify

the runup? and is citi's michael core bath finished with the kitchen sink. we will preview those and talk about why ebay's numbers fell a bit short. we'll begin with boeing. the faa and other aviation regulators have grounded the company's dreamliners as they look to determine what caused the aircraft's battery to catch fire. there's a look at 73 on the nose, our phil lebeau is at o'hare in chicago with the latest on the aircraft's woes. phil, good morning. >> reporter: good morning, carl. the significance of this grounding is that the dreamliner is really the plane that boeing has built so much of its hopes for the future around. well, now those plans are a bit on delays. only here in the united states action because the fundamental aa covers all of that, but also has been followed by groundings in europe, japan, india.

the issue is the lithium-ion batteries. one of the things that we're hearing is they're trying to come up with a way of testing the batteries in order to show they will not fail. they have to prove they are safe. the faa says the batteries represent a potential fire hazard. they said in their grounding statement, we will be taking every necessary step to assure or customers -- this is the boeing chairman saying this -- we will be taking every necessary step to ensure the customers and traveling public of the 787's safety and to return the airports to service. the last one to fly into the united states was here into chicago. a lot of airlines out of poland. it landed shortly after 8:00. lot and other airlines are looking at replacing them with other aircraft. for some airlines not a problem,

with others it will be an issue. this is really the one to watch. gsyuasa. gs yuasa is the firm that makes the lithium-ion batteries. yesterday the company said it may take them months to figure out why there was the emergency landing in japan earlier this weeks. if it's months before they an answer and a solution, then there's a real problem for boeing ahead. again, boeing looking for a solution, perhaps testing the batteries. that way showing, yeah, we know this one will not fail. phil, a quick, poland's lot has indicated it would seek compensation. is there any precedent for boeing to compensation carriers for a grounding? >> yes, not just boeing, but airbus. this happens all the time. if you are delayed in receiving your aircraft, you negotiate

with the airport maker. okay, how much is it worth in terms of compensation there. so, yeah, this will happen. it has been happening for some time as they've gone through these delays. >> phil, thank you so much for that. a busy day for you for sure. meantime, jim, we talked about the stock. some of the calls are not creeping out for mcinernie to go. >> the idea that you want to cooperate fully is different from the idea that you relesioned a plane that was ready. i think you don't get a grounding without raising the question was the plaeally ready? a flip side, i don't want to own the stock. there's so many other plays. airbus had a press conference that was quite extraordinary how well that company is doing. the long-term case for boeing is the orders worldwide for multiple years are so incredible that boeing simply can't be done

without. in other words, you can't walk away from boeing. someone else will step in the queue. i don't like the credibility issue here, though, because i think it's just -- i thought boeing should have gotten ahead of this. >> by that you mean grounded it themselves? >> you know, we're going to -- please don't use our planes, we will come up with -- i know jeffries has a note of only 10% recompense f although for a company of boeing's size, it may looks maul, but it does add up. so if you add that up, 50 planes were sold -- >> or delivered. >> excused me, delivered. 850 are in the pipeline. so we don't know. >> imagine spending $200 million on expanding your business for one of these things, and then being told you can't carry passengers on it.

>> yeah, this story has a ways to go. i think as an investor, jim, i don't know how you approach it, not even understanding the fixes or how long it's going to be or what needs to be done or will be done over the next few days. >> the s was at 69, 70 not that long ago when we felt the drimliner was doing better. why shouldn't it be at 69, 70 with the dreamliner doing worse? the stock is too high. it's too high versus the news flow. >> i agree. it's amazing how well the stock has held up, with all of these strings testify incidences, and now the groundings. it's still above $74 a share, so it gives you a hope there is some floor in the stock. investors are wig to step in -- willing to step in still. the airbus people this morning were talking about the notion

behind the scenes of listen, our plane is easier to build. so i think the next shoe drop will be some companies walking away from boeing, then you have to factor after that that others will come back in. boeing in the end, i come dawn to there, whether it's mcnerny, they'll solve the problem, but it's obvious they have outsourced everything. if it was made in redmond, i would say -- but this company is a parts assembler, unlike dell. this is just a multiworldwide build, and they're hostage right now to one company and they have to solve that. >> there's the intangible of the impact on the consumer. you read these reports about the battery which generates oxygen if there's a fire, so it basically fans itself, so it's much more difficult to put out these battery fires on these planes.

>> it took them 40 minutes to put out the fire in boston. that's a problem if you are in flight, even though there are other mechanisms to make sure the smoke leaves the airplane. >> the faa got ahead of it, the japanese plane company -- this is wrong, boeing has to get ahead of it, they have to gives a timeline, explain what's going on, and the stock will begin to recover. until then i think they have fallen well behind the story. that's unlike them. they should say we're a great company and we will do everything right. we're not getting that yet. >> boeing shares holding 73 right now. in the meantime we're also watching shares of citi falling premarket, the bank posting fourth quarter operating profits of 69 cents a share. meantime, bank of america says it send three cents a share in

q4. the common thread is these are messy, a lot of charges, fannie mae settlements. it's a headache for investors. what's the take away? >> bank of american in the pass that's frankly unfathomable. i remember why it went to 5, 6. bank of america is a law firm that is -- it's like -- it looks a lot like a bank because there's tellers, but in the end it's a law firm, associates and partners. the international consumer trends i like, but citi moved a lot. you always want your banks to put on a best face. anyone who went through the conference call -- actually there's more hue mill to goldman. there was a noeshs things are great. i look at these and it's like, well, i'm trying to understand

international. this is a bank in flux, citi, i think it's trying to fish out what it is. when it does, the stocks will go higher. >> i think there was a higher expectations, and that may have impacted the number. as you say, just going through the numbers. debt valuation adjustment, 485 million, a billion repositioning charge, legal charges of 1.3 billion, reserve releases, i want only 86 million, 'opposed to an expectation. it will be tenfold that, so you end up with the number, but we'll see. >> -- >> david, would you characterize it as a pandit quarter or corbett quarter? >> i would like to see how corbett would -- corbat would

characterize it. we'll still be dealing with dba for a while, though that may finally go away as well. please don't laugh mr. satin der -- actually i am msanitien der. there is a legacy. he may not have been the warm and fuzzy guy, but that's the business they like. you prefer the regionals to the money centers? >> they have credit, actual

construction loans, i like at bbt, i think the fix's will go away. i think these companies are actually growing. i know that may not be enough to trigger a lot of buys, but i do think the regional banks since we're still awaiting morgan stanley results. it's a line items, the fees were up 58%, wealth management, revenues more than doubled. those are all good news for morgan stanley.

that has been the unit that has been -- it's kind of risen or fallen with the ability of that unit to either meet or exceed expectations. or not come anywhere close. nonetheless, that's where we'll be focused in part, because then the debate will start about why are you guys carries this thing if it's not really carry its load. >> what i thought was interesting about the goldman call was how little any of the negative mattered. that's a fantastic business that i didn't think would have that kind of growth. one day bank of american will --

you look at the jpmorgan release, it's filled with record. was that a record? >> better than expected. >> you're like a stickler. >> two days we've ended on discussing lawyer fees. >> ahn someone who's had a law firm on retainer, i can tell you they're a great bargain, but i don't see it in these numbers. when we come back, some say it could have been even better. also, will we see the same from intel? a look at the tech sector profit picture when we come right back. helen ju, we'll find out whether or not she's still bullish. one more look at futures.

we'll go over it as well when "squawk on the street" comes back. at 1:45, the aflac duck was brought in with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac,

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this was a blowout fabulous quarter on ebay. you can characterize it any way you want, but a line, 220 millions accounts. my kids have paypal. i feel good about it, it's unhackable. you don't have money there, either. david, you were talking about someone taking $10 out of your account per month anded switched to paypal. amazon has fewer accounts than paypal. this thing is jawer naught hidden within a broader company as is the fulfillment business. this -- you interviewed him. >> i saw done ahow a couple months ago. he may be joining us today. >> what is he like? he's turned this company around -- >> he's lauded in the valley for doing that.

when you this i about the old -- and i used quotation marks about that -- how many have been turned around. he has managed to do that. >> is he a wizard? >> the marketplace has become a vibrant site again. now it may not be hitting perhaps where some of the analysts have, and i've seen various reports raising/lowering targets, but at the end of the day, the growth is back. >> is he more of a banker than a tech guy? this is a windfall, an amazing development, a stealth visa. >> he sent some guys off to australia literally, and think about this. >> go think. >> and they did it. >> have you ever gone for a two-week thinking vacation. >> i've neff actually had a complete thought. i'm working on it. >> people with help with you that. >> why can't our bosses say that? just go to australia for a

while, think about some stuff and come back. >> i'd do it. >> i felt like he was encouraging that a bit too much. >> maybe it's time, david. go to new zealand, take in that hobbit thing. >> take in some shopping. >> you're shocking, my friend, bloomin' onion. >> a visa would imply that the p.e. is capable of expanding. analysts are already saying the valuation is full. you think no? >> this is now a momentum stock. once then get into that orb, we know you can start saying, listen, i know i shouldly looking at the market cap, i think they just overshoot and it goes too high. it is not there yet. when we come back, cramer will talk about other stocks worthy of your attention. later on, former continental

ceo gordon bethune, what is he saying about, as the jet's mishaps continue to mount. [ male announcer ] alka-seltzer plus presents the cold truth.

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call. now hi piles on at 20. i think john chambers will finish strong. the guy likes juniper. juniper does have some telco business, but i do not want to own juniper, i want to own cisco. i think frankly this call will be wrong. juniper is cheap, you know, juniper has had a nice move. i just think that the idea that cisco is doing poorly is just not in sync, and i've been critical of john, but not right now. how about apple? >> wow, appearing, okay, listen, we're starting to get people coming out of the woodwork saying it's going to make the quarter. goldman says it will be a nice surprise. i want to point this out about apple. i think there's a bit of a charm offensive going on. apple is saying, listen, you may think we're like dead, you know, but there is a pulse, maybe we're okay. goldman is uses a number that is so high, the idea you would want

to leave apple if you're a value fund is ridiculous. i think the shareholder base is in flux, and i know people feel it's lost its luster, but geez if they do a -- >> williams and nona. >> this is that valuation nonsense i keep talking about. williams nona said a 4-lulls percent number. i regarded that good given the temper of the time. goldman said the story has kind of played out. i would say listen, if you have a househod play, anthro -- making its debut this morning, cvr refinings's first trade in a bit. s ]

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this impairment charge over at rio, but jim, is the tone today all based on how two banks traces? >> we're so used to the macro being bad and the micro being good. today the micro frankly is kind of overwhelming. boeing not being that good. we really thought it would be good things. only cvs seems to have news that gets the juices going. >> the shares will be up sharply. you can see it right there. perhaps more than some had anticipated. i think some who follow it closely, not a huge surprise for those more -- all the raves these days, whatever you've got. if it's this, make it into a reit. stock reacting very positively. >> look we did american tower,

the cell phone company concerned into a reit. i like -- they know more about football than anybody else i know. a look at the s&p as the stocks fill in at the big board. nrg energy celebrating the recent merger with gen-on energy. and part of the ireland fund. more financials, blackrock beats. >> yeah, yeah, well, look, companies are taking in a lot of assets. i think you sue the inflows, people after the uncertainty of the fiscal cliff ending, money is coming back to these funds. i think it's a decent story. i've got to tell you. the negative still among the analysts, bank of new york was downgraded today. you would upgrade bank of new

york, not downgrade it. the analysts i think still have to catch up with the valuation stories. >> say her out with a downgrade of goldman sachs, so similar call there. we're watching the home builders. and we're seeing home builders , across the board trade higher. the etf that tracks home builders up by about a percent. and jim, it's interesting you hear about all these, a story yesterday that lenar is going into the rental business, just when we thought maybe rents had peaked. >> stuart miller knows more than pretty much anybody else i know other than may bob toll. more importantly i want to say that palty homes can repeat as a

great performer. it's real. interestingly -- >> just want to point out, the noise, the pinoff from cvr energy in which carl icahn had -- this is cvr refining set to go bub at the big board, $25 a share, which is right in the middle of the range, 84% owned by cvr energy, which trades under the ticker cvi. that's why you hear the shouts behind us. >> our friend dan dicker saying this is a must buy. holly frontier has been returning so much to shareholders. these companies are a big beneficiary of the glut of domestic oil versus what we can charge, you know at the pump. the united states oil is so cheap. a couple incongruities today. at yet the dow is positive.

you made the point about the macro being positive. >> we are in a rising tide situation. you know, we're supposed to -- if you listen to anyone on how america is doing, i mean, you really think we must be doing terrible. we have higher payroll tax, a gridlock in washington, but the actual job growth is very out of sync, and it almost says like, listen, we got rid of this, let's start hiring. we may be looking at this debt ceiling, and i'm going to invoke shakespeare, the bard, that this may be much ado about nothing. i'm going there. right here. >> right now? the cliff is -- >> don't you love -- you know, when i first heard, i thought what a great title, i said no, moran, take the shakespeare course first the it's going to

be claymation death match, maybe ufc, you and i watch that in our spare time -- not -- but i don't think it's as important as getting through the fiscal cliff. people are hiring again. >> dow transports continue to hit six-year highs. >> even as crude is up 95. >> it's like a market that has transport leadership. did you see union pacific? we had mike's southern on "mad money" he says point-blank, the hole has bottomed and is starting to go higher. and be good to the shutdowns, the coal plants. don't forget china has been burning coal, like you wouldn't believe. much more inventory reduction, because it is so cold. don't care maybe as much about the air. >> apparently not given what we've been hearing out of the beijing. >> can you see your feet? klaus kleinfeld, i like to invoke him. >> i think something is ringing

when you say it. >> talks about whether you can see your feet in beijing. >> well, yeah. one is michael dell working for -- >> thank you. >> is michael dell working for himself or shareholders? >> right, of course. >> and this intriguing piece about whether at&t will buy something in europe. >> european or international forays for some of our domestic carriers have not always got particularly well, they may be softening it up to at least expect something. we know that, the huge deal they wanted, and of course it was set aside by regulators. we'll see what they choose to do, but it has been fraught with complexity, those moves overseas. >> but now we're big. >> and verizon has vodaphone as a partner in wireless here, they need the balance sheets to do something great. >> they can pull it off. no doubt about it. at for dell, we certainly

discussed that i think, carl, but it's worth always keeping in mind, because again the conflicts that are inherent, regardless of the steps to take, are difficult to navigate when it comes to a founder with a huge stake, who wants to take his company private. >> why are people interested in these businesses? why did hewlett-packard -- i know you cooled expectations and speculation, why is anyone interested in hewlett-packard? what are we missing? >> cvr refining it's higher by about 0.6%. so not bad. >> not bad. >> a market that's relatively flat, so trading pretty much in line with the markets here. >> hewlett-packard, listen, we'll see what occurs there against. you can say the same thing over and over again, so i will. i think the patience of shareholders is key here. . certainly it's not going to be five years, but we're into it already a year and a half or

whatever, but if this el aren't getting signs that things are starting to turn, you may see more activity from the shoulders, and then that would go to this argument of could you break it up? are there buyers for some of the pieces. things like eds seem to be so intrinsic, not to mention any growth they're seeing. certainly not part of her plan. they are not entertaining offers. >> but is there a core business here? this cvs, says listen, outdoor tiesing not core. hewlett packards, different divisions, perhaps printers not core. >> printers not core for hewlett-packard? >> when ibm spun off its printer division, people thought that's heresy. it turned out to be a good move. >> you know, i think you'll hear more and more about that argument as we've said many times later in the year. this is the -- cvs, that's quite a move.

they started off great. >> content is king. >> definitely. >> we're a content company. >> you are walking content, perhaps more than any other human being. >> sponsored by myself. >> bob pisani is there, good morning, bop. cvr refining, opened at 25 and a quarter. the bottom line is what's attracted people to the mlps or juicy yields. this is like 18%. we saw a compression open. sun coke will probably -- these energies own real assets. and that's usually what attracts

people to them. remember, that's the dividend yield story. let's make sense of the basic of america earnings report. the press release was 38 pages. the real in other words, they read the 10-q. did you read it? i didn't either. it's not even posted, but i did look at last quarter's here's the earnings report, the 10 hq last quarter, $265 pages, this is the official earnings report. hope you all read it next time. i tried to get through parts of it. let me tell you, it's a tough slog. what do you learn when you read this thing? what you learn is they're really kind of stuck. they can't do that much. still not an awful lot of economic growth, so they're down to reducing staff. on page 5 of the press release, bank of america fired 14,601 people last year out of 267,000 employees. jim, you had it right right at the top. bank of america is a law firm

masquerading as a bank. i'll try to get to more details. what bothers me about the earnings guidance, no direction, no like we're very pessimistic. so far on the big banks everyone has declined to say anything. jamie dimon said he was optimistic. we entered 2013 strong and well positioned for further growth. that will help me evaluate whether i should buy, sell or hold bank of american, this is the earnings divide, where it is. those who believe that we're going to get top-line improvement at q-2 and those who don't believe it. that's all you need to know. that's where the bulls and bears are. this beating on the bottom line, flat on the top isn't going to continue going into 2013. let me conclude by talking to why it's so quiet. number one, the vix is only one month out. nobody believes there's going to be resolution on the debt ceiling. number two, earnings season is not moving the die so far, as i

mentioned economic news has been quiet. finally, of course, europe has been stabled. 9 good news, folks, individual stocks can move. did you see new highs yesterday on the bank stocks? they're mattering, individual stock picking moves are going to matter. finally december housing, but multifamily still predominates. more on that later on. guys, back to you. >> thank you, bob. >> ben-jarvus green-ellis, one of the big law firms. here's a couple starts. each was bakley up at 4 1/2-year highs, june of '08. but we'll call it 4 1/2 years, so these aren't bad numbers. if you look at initial jobless claims, all that looked terrific, except for on the claims side, it was a completely

different story. they didn't drop down nearly as aggressively. we're up four basis points, but maybe the key continues to be the technicals, a chart starting on december 1st, basically in december we started a wave pattern, 1, 2, 3, 4, we're starreding that fifth wave, probably takes us up somewhere close to 2%. that's what people are looking for. it's interesting. let's move to the currency side of the equation. if you look at the euro versus the dollars, wow, euro is screaming today. you look at the euro/yen, that's screaming as well. the dollar/yen is screaming as well. so the dynamic of the yen continuing to be under pressure. will this be a huge move? many think, if you talk to some of the japanese officials, they're say it's just getting back to a reality after the end was pretty much decimated about a year ago with respect to too strong relative to the other

currencies. no matter how you slice it, all that meats is where we are now and where we're going in the future. >> thank you we'll find out the latest movements in energy. sharon, take it over. >> it's all about algeria. a lot of traders are paying attention to the ongoing hostage situation at the gas field where islamist militants had attacked that facility and still holding some folks hostage there. we have learned from the algerian news agency that about 45 hostages, including some americans had escaped the complex, but still bp is confirming that the situation remains unresolved. it tellses it has confirmation that five of its employees are in safety, but 12 still are involved in this ongoing hostage situation. this has helped to take brent crude prices bo of the -- and we're still looking at big gains as well in the wti complex. some of this is gee on political risk premium that's inned

marketplace, but also some of the economic data that we're getting in the u.s. the jobless claims numbers, same with housing starts numbers, and then the euro rallying also helping the complex. this comes after action of course, the big supplies drop in crude supplies yesterday, so that also is helping the wti complex get above $925 a barrel, the first time we have seen this in about four months' time. keep your i'd on that spread as well. david, back to you. >> thanks very much, sharon epperson. did want to talk a bit about herbalife, the company out with news, releasing preliminary fourth quarter in 2012 results. the results of that perhaps surprisingly is that the stock is down. you can see it there, over 4%. this ballots ground stock involving some of the biggest personalities in the hedge fund business, just a fascinating story. as for the news, net sales the company says expected to be up,

let's call it about 20%. earnings per share, a buck two to a buck five, that versus from 86 a year ago. let's call it about 125%. preliminary results rub expected, net sales up against for 17.9% overall, and fully diluted eps expected to be 402 to 405 versus 330. that again for the full year. perhaps one reason the stock is not up is that there had been a hope among some that are long that there would be a significant expansion of the stock buyback or an immediate return of capital shareholders in some way. remember, this company does generate a lot of free cash flow, and has bought back a good deal of stock, when you're talking about a float of 108 million shares, 26 million shares, my sources tell me short alone about 37 million overall. you can create quite a potential

squees. that would be something -- and mr. icahn who's believed to hold a position smaller than that, but nonetheless a position, may be banking on. they have already seen a big return. important to point out with dan lott, that was certainly -- having booked an enormous profit. >> he could have been out days ago. >> he could have been out days ago. don't know whether that's the case, or maybe he's still if there. the dynamics are so interesting when you talk about the stock itself. forget about the fundamental argument that is the heart of this. there is also just the stock story. >> michael johnson, disney 17 years before he came to herbalife. remember they brought the company public, it was private. it had got private and was very successful. he's bought in, 145 million shares six years ago to 113 million. the idea he doesn't announce he buyback today, that's fatuous, the fact is this company has gigantic cash flow, it's

increasing, it is a mexican/south korean, european company, not just the united states. you need a government investigation and injugs to stop him if he wants to go higher. >> that seems to be the crux of mr. acman's argument. that eventually it will shut them down. >> obviously they can take profits heave, right? but this isn't -- i have 6:00 that if lobe and icahn want to come in at the same time that the company comes in with a buyback underneath action then this is a better long than a short. >> it's interesting in the conversations we've been having with lawyers, acman has boasted in the past he -- has more -- >> what's the price per lawyer, like a p.e. kind of thing? i think herbalife, this is a battleground like you wouldn't believe. will be back to where -- >> it's higher. >> right.

i just think that you're misjudging michael johnson, if you think he's not going to be there buying back stock. he's a passionate man. i don't want to misjudge michael johns un. coming up next, the need for speed, ducati and how they plan to rev up performance this year. [ male announcer ] you are a business pro.

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tim geithner celebrating last night. >> still on a budget. >> so no alcohol served, we know that much, but at least hopefully geithner got some cake. what message should have been written on his farewell cake? tweet us. we have a new handle, we've got your responses throughout the morning. we'll share your responses. >> how about thank you for saves the american banking some system? >> some people like that. >> i think tim geithner did a

fabulous job, wish him very well. in the meantime, a big reason why you should prepare more for the salad. the cold hard facts later in the show, but first. coming up, not exactly ocd behavior, but certainly something requires -- and nobody does it like jim cramer. six stocks in 6 on seconds, when "squawk on the street" returns.

the s.e.c. issue, give me a break. it looks -- don't sell it for that. >> jeffries leapwire hold or sell? >> i was talking to david fablers, always breaking stories about this group. i don't think -- >> merrill columbia sports? >> i happen to like their stuff. this was a major inventory problem. >> gorilla class turned out to be not what we thought it would be. >> asml.

>> this was not a good quarter, and the stock is up. that just tells you how pent-up demand and how short people are for ultraviolet lithography. >> goldman likes hertz? >> yes, i think it's been very misplaced. >> and i guess that's all we have. like through six. >> i think there's -- this hertz is very interesting. the guys all downgraded on valuation. goldman said, listen, valuation is very inexpensive. let's go back to asml. i think there could be a developing short squeeze in tech. autonomy, like hello, what are you buying there? it's like a supplement -- no, that's herbalife, but i feel there are lots of people who say, you know what? tech, i've got to get in non-apple tech. that's what this is about. asm was a disappointments, came over in the middle of the night, believe my if i wasn't so

excited about chip kelly, i wouldn't have seen the number cross. >> what's tonight? >> tonight we're actually -- tonight we're going to talk about the battleground between hedge funds, and we're also -- i'm not supposed radio el veal exactly which stock. >> you can keep it quiet. >> we're going out with the philly fight song hit 'em high, jim. >> you bet. watch our eagles fly. >> we'll see you tonight. in fact, the phil,fed is after a short break and american aairlines new logo unveil when we come back. what are you doing?

nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go...

we got clients in today. [ male announcer ] save on ground shipping at fedex office. it didn't come out, but to the down side, not the up side. minus a.8. the last read was benchmark revised. we had a bunch of benchmark revisions, so we want to pay close attention to the fact that the november number is our comp, but this really is a bit of a

reversal. 9 market just gave back a bit. the stocks, the dow is up 63. now up a whisker, so this number is always appreciated by the marketplace, and one of the few january reads, so always a bit in front. carl, back to you. after housing starts and claims today, we have two out of three, as rick said. the dow still up 40, the s&p up more than four. again that's the highest since december of 2007. the analysis talk up about 11 and change. back to the big story of the day under the pressure after all the 787s were grounded in the u.s., ranging from fuel leaks to battery problems, the f.a.a. saying boeing will have to prove the batteries are safe better flights can continue.

mary skachiavo is with us. >> actually they were being very careful. they used a scalpel instead of a meat ax, by making it directed only to the lithium-ion battery problems and the system that is it runs, as soon as boeing can get a handle on that, it can present an acceptable fix, they can resume, the faa could have been draconian and simply yanked the certificate for the plane and said we're going to wait for the whole review, so boeing has a chance, depending on what's required. >> from a passenger perspective, mary, these problems sound absolutely frightening, to think of a battery that when it burns and when it's on fire actually generates oxygen by which the fire can actually continue and perhaps grow. that's scary stuff, p ultimate

it in perspective to for the flying public. is this a big safety concern? >> this is a big safety concern. many of the other problems this airliner has experienced in its roll-out are comparable to other planes. all planes have what boeing called a heating problems, but here the problems have now happened twice. though fume events could actually, you know, they could kill people. in addition to the fire, which obviously could. so this was very serious. one it's nominal, but when it happens twice, it's a trend, so they had to act. >> the biggest question, mary, surely is whether the faa should have been allowed boeing to build these with think batteries, they are known for catches fire, the faa, in allowing them to be certified to use them has laid down specific measures to try to reduce the possibility of fire, but there's

a big question at the heart of this ect,e not? >> yes, absolutely. the faa last week in their press conference, when they announced basically the nose tail review of the plane even said -- they admitted they were not confident of their certification work, that the faa had done. i think the faa stands to bear a good measure of this glam, because they should have been on top of it, and because it is a new application, that's where most of their resources should have gone, to look at what's totally new on this plane. the faa has some explaining to do. >> your line of logic, therefore, is very dangerous, then for boeing, for the faa and for this project. we should be very clear. the 787 is a more fuel-fish, yes, but it also doesn't have the heavy, pneumatic systems. it has this unique electrical system which relying on

lithium-ion batteries. how far do you go that actually it has potentially a conflict of interest in that it has to both regulate and promote this industry. >> that's true. that's why when last weerk the faa at the press conference said this is a safe carrier and there's no problem with this one, that isn't their role. their role is to regulate and oversee and really that is something that the f amount a could have done and should have done. there have been other planes with new systems. the 77 had the same bumpy roll-out, but there was not a major problem with one component. if they switched it out, you're absolutely right, they may have to reengineer the system, which would add weight. that's a very critical component for this very efficient, modern, highly desirable plane. >> mary, does the bar go higher for fuss planes? i'm asking you this, because

airbus's ceo in the earnings conference call said they were confident that their carbon composite airline e. which is dependent on the lithius-ion technology will make its volley anling midyear. >> that depends on the fix. the batteries came from a manufacturer in japan, if they can get a battery that doesn't have the fire, the fume leakage and fire potential literally boeing could have its fix in the matter of days or weeks. if it's still not -- ted affect airbus as well. >> do you think heads will roll at the faa, mare,? >> no, i don't think heads will roll at the faa. do i think they should? yes, particularly if the large aircraft director in seattle, it was the group at the faa oversaw this, now of course faa has brought in personnel from other parts of the country, but this is their job. they no longer have aviation security. safety should be their primary focus, and i think because it's

a new application and a highly desirable application. we said this to work, we the flying public and the industry wants it to work. it's a shame this is the roll-out that it now has. >> mary, thank you for your time. we appreciate it. >> thank you. before we leave the airline industry, within the last few minutes american airlines has revealed for the first time. much-awaited logo. let's have a look at the new american airlines logo. not that dissimilar, perhaps. the interesting question is, if you're unveiling a new logo, what does that mean for the possible merger prospect? >> it is the first redesign of that plane, i think since the '60s. >> wow. >> we'll be getting very near decision time on the u.s.

air/amr deal, where 60% would be owned by the creditors of amr. >> do you think -- are you hearing that the deal will go through? >> i think the expectation, simon, is that it's the more likely outcome at this point, yes. of course, that would have significant reverberations throughout the industry. >> so let the critics begin picking this new livery apart, which they have already done in some circles. still ahead, wile the fallout from the fiscal cliff pales in comparison to the economic compare source, b of a and citi under pressure this morning. we'll read through the numbers in just a moment. with the spark cash card from capital one, olaf gets great rewards for his small business! pizza! [ garth ] olaf's small business earns 2% cash back on every purchase, every day! helium delivery. put it on my spark card! [ pop! ] [ garth ] why settle for less? great businesses deserve great rewards!

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welcome back. we have an update on the situation in north africa. the workers at the algerian oil company's joint vehement further in amenas. bp says we have been informed that the algerian army is attempting to take control of the site in amenas. we continue to seek updates for the authorities. sadly there have been some reports of casualties, but we are lacking any confirmed or reliability information. there are reports of hostages escape, but they do not

elaborate that. they say as a precautionary measures, they're bringing home nonessential employees. this is a big deal for bp. they've been there since the 1950s. very involved in the country. simon, when we have more details, we'll bring them to you. >> michelle, thank you very much. meanwhile, we're at the height of earnings season. bank of america and kayla tausche has the, both of those banks hit by steep legal costs.

citi only released $86 million from this pool. until had can see how it affects the housing recovery. releasing $900 million, as well, and that pool includes mortgages. while b of a is not entirely out of the woods, kreismt o brian moynihan said the settlement means that earnings should now be clearer, with growth across all businesses and expenses declining 6% in the last year. he says the drop in delinquency rates should shave arch additional $1 billion out of expenses by q3. other than the, they said citi needs to set more efficiency targets across the bank, and those targets should be clearer in the upcoming months. both companies noting the overall capital positions better than last year.

back to you. >> kayla, thank you so much. making it relatively easy to understand. for more analysis, let's bring in jeff hart. good morning, these are a bit impenetrable. how do you read them? >> that's the trouble. they're big companies with a lot of moving parts. at least to me the disappointing things from both companies day was they relied on tax benefits more than we expected, and that's kind of lower quality earnings to me. but i think the real key is to look at our core or sustainable things going on, but i think when you look at things like loan growth, things like credit quality, when you look at their net interest relative to their banks peers, i think there's a lot of things, not least of all

expenses in banking right now scale matters better than it ever has. both these guys have scales, but i didn't see much in the underlies trends that concerned me. >> are the expense targets at bank of america realistic in your view? >> i think they are. it's not so much to me a question of whether they'll achieve them, but when. the legacy servicing portfolio roll off, things like that, i think they look at the efficiency targets as a matter of timing to me. >> on the citi side, everyone's looking at these litigation fees, the forecast for litigation fees. is that a signal that regulatory pressure are going to be more of an albatross than we already thought? >> i don't think so. there's been big lit base charges quarter after quarter, it seems. . but it's not unprecedented in recent times, and hopefully this gets some of it behind us. i don't have the feeling that kind of regulatory pressures are

building on the money center banks. i actually feel the environment is still tough, maybe getting more friendlives can i ask you about the rally we've had generally? it's notable that goldman sachs has outperformed both the ac and citi with an 18% rise in the stock over the last month. today, of course, you downgraded goldman sachs in the light of that move. where are you on the sort of share price movement that is we might see in those three and oats moves forward? >> to see additional up side in a broker dealing, you have to see the economy get better. that could happen. i'm hoping it will happened. i'm just not sure if this is the time to put new money into goldman sachs, if we're sure not sure that will play its way out. it's just a matter of, how long does it take for the uncertainty to get out of the way, so companies can get back to making acquisitions.

>> jeff, do people give you a hard time when you cut the ratings and yet boost the price targets? that gets made fun of a lot. >> yeah, we do get some for it. the price target increase, it's very form layically driven. what our pick it into our what it's done over the last decades, and the price target -- i don't think 1.1 times tangible is expensive, but we do get some push back on that for sure. >> i'll bet you do. we had a discussion earlier about whether the go long money center short liegen center will last other reverse. do you have a view? >> i would expect it to last, maybe continue. the pressure is hitting the bank industry right now. i think the money center banks have a usneaks advantage to not have as much pressure and expenses. it's tough to be efficient with

the rising compliance, and similarly i think the money center banks have unique scale there to outperform. i do think the money center banks will still be winners going forward. >> well your week's not done, not yet, anyway. more to come, jeff, thanks again. a bank with no branches. we'll introduce you to a company looking to take on the big financial firms with the smartphone-only bank. ♪ [ male announcer ] when we built the cadillac ats from the ground up to be the world's best sport sedan... ♪ ...people noticed. ♪

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debt ceiling ises much a war of words as it is with numbers. what constitutes a default? and with the economic damage of hitting the ceiling could it be worse than the fiscal cliff? steve liesman has more on that. steve. >> the questions are not easy. they again into sell mandics and have everything to do with if the debt ceiling is solved, and

if only for investors, the most important part, what's the economic impact? let's look at some of the rhetoric. the debt ceiling, is it a real tragedy or soap opera? what we have done is graduate the screen from blue over to red, democrat ideas on this side, red on this side. democrats right now hitting the debt ceiling, not raising it. so some republicans say it's manageable. on that issue carl mentioned of default, any missed government employees, that would constitute a default. others are say no, no, we're not paying off the debt itself, that's what default is. on another critical issue, could the government prioritize its payments, take the payments, the cash that's coming in and use it to pay a certain number of things? on this side,ed article mrgs is saying no authority to prioritize, and no ability, and the treasury have different

payment systems. republicans say yes, and in fact they're working on a bill right now that the government can pay interest on the debt, social security and the defense and military salaries. on the issue of how markets will react, the idea they'll demand higher rates, some saying they'll overlook this gritlock. finally on the economy, as carl mentioned. alan blinder saying this would be a depression rather than the gop saying otherwise tunnel rather effects. let's do what we call the debt ceiling game, the home edition. here's a bunch the things the government has to pay. interest on the debt. federal salaries, $19 billion. you've got to pay your tax refunds. if you were the treasury secretary, how could the possibly match incoming cash, which is about $2 7 billion a month with expenses? we have rigged the game here to work. if you decided to pay all of

these things, federal salaries, retirement, interesting that would be your total cash flow, which means you could not fund, come on over here, these things. you wouldn't fund health and human services, not pay tax refunds, close down justice, fema, energy, f.a.a. that is how you match the two things. finally one last thing here, the difference between the fiscal cliff and debt ceiling. fiscal cliff we thought would be a 4% hit to gdp, and i don't know, 400, $500 billion. take a look now at what the debt ceiling would be, if you reached the debt ceiling and reduced government spending by that amount, mark sandy, others suggest it should be a 7% hit to gdp. so, simon, a big war of numbers, and big war of words on both sides, as we game out what happens, first with the debt ceiling, then we continue resolution, and also the

sequester. simon? >> let's hope they rise above. thank you very much, steve liesman with the fiscal cliff. it's been the trade of many people's lifetimes, but with the courages sill at multiyear lows. and the meeting next week, will the trade last? it's the "money in motion" section. good morning. >> good morning. good to be with you guys. what about this dollar/yen trade? obviously the dollar is substantially higher today, but monday/tuesday/wednesday, we've reversed the trend, the yen was actually higher. where do we go from here? >> i think steve's presentation is one of the reasons i'm cautious on this trade. we're within a whisker of the obvious target. i think that trade level will stall. to me i think the better trade is to take profits and go the short side. i would like to be a seller of

dollar/yen at 9, if it breaks down to below 89 with a stop at 90, then take half the position off at 88.50 and go to breakeven. i think the way the currency is trading right now, if it fails at these levels, it had create a triple pop failure. it will create a cascade to the downside. for right now it's just too overbought. >> what are the implications for the other crosses if that does break down? >> if it breaks down, the yen crosses with it, it will tail the euro/yen down. that's also stalling, and aussie along with it for a bit. again, i think this is a corrective move that's going to be substantial, and one that traders could profit from if they go to the short side. >> boris, thank you for your time. an interesting call there. for more currency trade, be sure to catch more tomorrow at a:30

eastern the if you want more education about currencies. tonight on the television premiere of "shadow billionaire" after dhl founder vanished during a routine flight over the pacific, several young women claimed he had fathered their children and sued for a piece of his massive fortune. as the ballots heated up, the sordid details of the secret life began to emerge. >> our local counsel in the philippines gave us a tour of his manila, the clubs were unbelievable. they're or four or five hundred women in them who are classified either as dancers, nude dancers, or guest relations officers, g.r.o.s which i thought was the most formalistic title i had ever heard for a hooker. >> do not miss the premiere tonight at 9:00 p.m. eastern and pacific here. >> what time was that? >> 9:00 eastern and pacific.

when we come back, goldman sachs strategist lays out the best sectors to play and whether or not the saul run so far has further to go. what are you doing?

nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office.

you're looking at natural gas futures climbing a bit toward the $3.50 level. we're looking at the latest

report where it says that natural gas supplies, actually the number of natural gas supplies in the last week, it was down 148 billion cubic feet. we're waiting for the trader to tell me the number, because the board change, looking down 148 billion cubic feet, greater than the expectation, that's why we're looking at natural gas futures here. keep in mind the traders are looking at the weather coming up in the next week. it's expected to be bitter cold later in the month and into the next month a bit warmer, so of course the demand and what that means for natural gas and stores that determines where we're headed. back to you guys. >> sharon, thanks so much for that. some market reaction. got pretty decent macro data out today, philly fed not as good, but the dow is climbing to 60 points.

one of the big piece it is, it's grounded ought dreamliners until further notice. phil lebeau joins us with the latest. good morning, phil. >> good morning, simon. if you take a look at shares of boeing, they're not off as much as you might expect, in part because many people are hoping they'll find a solution to this airworthyness directive. first, let's talk about this drowning, it effectively what it all evolves around. that's what prompted the faa to step up and say, you know what? these conditions if not corrected, could result in damage to critical systems and structures, those batteries, by

made are made by a gs yuasa. overnight the company in japan said it may take months to find out the call of these failures. it has not been altered. boying still sticking with the plans. they also have not seen large kanz lace from their customers.

the belief or the hope, we should say, among many investors that boeing will come to a solution that keeps it going and gets the current dreamliners back in the air. coming up with saying we know this battery will work as planned, and if there's a failure, that it will function, the redundancies will work. we're a long ways from a solution being signed off on, but that is the hope of investors.

that's not where you think the industry is now at the moment, clearly. they're in airbus planes, a number of other aircraft. they've been tested extensively and with other engineers around the world. the question in this case is are the ones being used here functioning properly? what caused the two failures? that's a way different question than should list up-ion batteries be used at all. >> thank you, phil. >> you bet. the composite has had a nice run. many saying the worst may be over for the world's second largest economy. china is out with fourth quarter gdp numbers tonight, and goldman sachs is saying there are even more returns to come this year. helen zhu is a chief strategist for goldman sachs.

great to see you in person. what are we expecting overnight. and could we see the sonar wrote where the stronger the number the worth. >> well, i do think people are expecting a bit of a rebound. clearly a lot of the export drag we had seen in the third quarter has passed. a lot of the loosening policy measures that the government introduced around the second and third quarter are definitely have been an impact. we do think it would be reflected on top-down numbers as well. for the year as a whole, for the fourth quarter that's a bit south of, you know, 8%, so much improved versus the 7.4% we had in the third quarter. as for whether that means less stimulus, i don't think there's too much expectations about further stimulus from the market at this point, you know, the economy is clearly back on track. if there are unexpected, you know shake-ups from exports and the external environment, then we wouldn't rule it out, but i

don't think the market expects more. >> no bombshell during the chinese new year holiday, which is what we have seen in the past? >> we think it's relatively unlikely. the economy is morrow less back on track. we think there would be more proactive fiscal policies to come action but most of those announcements will come likely in march. >> the new government has made several nods towards urbanization, so we've seen material stocks go higher. investors like to think of china in the growth sector. is that where you see some of the best opportunities at this point? >> we do see a lot of those sectors did run up after the urbanization push and all of the news media coverage around it. we see more details on the exact urbanization probably in march or april, but at this point i think there's numerous ways to go. the obvious interpretation is more infrastructure investment, but other than the, premier to

be has been very focused on the social safety net issues as well, saying he needs to migrate more people into the urban areas. you need to provide better health care and better social housing, so don'tunder estimate what we might see. >> another long-term issue is basic manufacturing is starting to leave china, that the costs of doing so are rising and other nations are benefiting from the lower cost of labor. is that incorporated in the gdp numbers? something that people should pay attention to? >> well, you know, i do think that's a phenomenon that's already started an will probably continue. i think the policy makers are trying to mitigate the impacts in the short term by doing things like migrating a lot of the manufacturing industries from the eastern seaboard over centering and western provinces where wages are probably a bit more competitive, drastically fortifies the infrastructure, to make sure that even as the wages are going up, at least you're

getting more efficiency and cheaper transport costs, et cetera, but i think it's something we need to look indeed immediate term and say obviously the direction is probably likely only to shift one way, so the government needs to try to make sure that services-oriented industries continue to prosper. the other things they're trying to do is introduce more labor from the primary industries into the secretary and tertiary trying thus things like reform, which we think will be an essential part of this blueprint. the regulator said last year we allowed $16 billion of extra foreign money to come into the nation, which was i think the equivalent of what they had over the previous six year, and even said we could go ten times that amount moving forward. did the stock market move 3% because it's actual lie quite an illiquid stock market, and that could mean a huge amount for the market or because there's an

exponential, of how much more money could be let in? >> i think the market is very liquid. so as far as the foreign money is not a large percentage, but in the medium to long term, they could go up ten times. remember, he didn't set a date on that, but it does give people the few that main foreign buying could move from let's say 1% to 2% all the way up to something more substantial. i interesting thing to note here is in the last few months, as we saw, it was actually the foreign investors who got into china earlier, so a lot of the retail guys are thinking, hey, maybe the foreigners know what's going on. if they're much more kind of active in our local market that may not be a bad things. >> hell evan, thanks for coming by. good to see you. let's get a market flash. >> good morning to you, simon. december housing starts jumped

for the highest levels in june of 2008. pulte up, and lennar up. and the biggest gainers in the s&p 500 so far to date in 2013. yeah, it's only been a few weeks, but still it counts. if you look at the dow jones u.s. home consumption, this has already gained more than 71% in a year. carl? >> yep, a lot of people are already aware. the push to get consumers to bank online and with their mobile devices. one financial institution is doing away with the physical bank all together. will security fears turn these consumers away? we'll find out when the ceo of green dot joins us next.

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one financial firm is doing away with physical branches, it's launching a bank for the smartphone application. joining us is steve street, chairman, president and ceo of green dot, the parent company of go bank. good morning to you. >> good morning. i'm looking through some of the details of how this works. insured by the fdic, no overdraft fee, no minimum balance, a pay what you think feels right monthly membership fee. is that a real business model? can be profitable whether or not anyone pays us that voluntary pay what you want fee, but it sets the right tone. it feels organic, morgue, more respectful for our customer base. if you're in college and we're competing with pizza and beer, we may lose that fight and pizza and fear may win out over the bank fee. for a lot of people who we

researched, the feeling was if it's a great service and the bank is respectful, sure i'll tick in some money every month. so we think some people will pay, some won't. but it's a unique feature. >> they still bet a base salary, albeit low. they don't model their whole income after getting tips. how do you make money? >> no, we have other more reliable buckets of revenue. so, sure, the answer is first interchange, the amount the merchant pays when somebody uses a go bank debit card to make a purchase. we get part of that fee, which is called the interchange. we have a massive fee-free atm network, but occasionally people will use out-of-network atms. if they do, we use money on that. >> how come you have such a big atm network for free, twice the

size you say of your competitors. >> so that the customer is on the find me a free atm, you see them populate in rho front of you and typically one is within a short walk of where you are. that's how we did it. whenever you're building brand-new ideas and brand-new virgin technology and code, it takes some time. we've been working at this for, gosh, a year and a half or better, but we were able to achieve that. we've making some money with people use out-of-network atms, we have a custom card. some privileges of ceos, i get to use my dog as a mascot, but many people in fact like to order the custom card with any photo from facebook. >> steve, you have a market cap of $470 million, this is not just an app. it is a bank, and i was really beginning to believe

until i was working my way through the notes to the point at which you told our researcher, no system is hackproof. so -- >> that's right. >> if you don't believe your system is totally hackproof, how can i possibly bank with you? >> well, respectfully only a fool would say any piece of tech following is hackproof, i don't care if ye pentagon or green dot or chase or bank of america. a security is a and- game. you have tremendous security protocol that you follow, you do all kinds of testing, and then you have a lot of customer protection, so if a customer were to lose their money, whether it's our bank or any regulated bank, the customer would never lose a penny. we think the app. is super-secure, we're pleased with you will a of that, but nobody in their right mind would say that any technology is hackproof. >> it's an intriguing proposition. you might work on the banker uniform. we're not used to argyle

sweaters, but we appreciate your time. >> my pleasure. thank you all very much. steve. streit, with go bank. we have the details next on cnbc. it's a new day. if your a man with low testosterone, you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these signs and symptoms to your doctor if they occur.

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amazon taking aim at apple as amazon's store and 22 million song catalog is available to the ipad and iphone touch users for the first time. >> this is a big change. up until now iphone users haven't been able to buy music from amazon on their devices. amazon has redesigned their store network with iphone and ipad touch. now they can buy songs from amazon mp-3 songs and that have those songs show up in their amazon cloud player app. it's still not as easy as itunes. users can't buy songs directly from the app they have to go into the safari browser. amazon is making this move because apples prevents companies from selling content without giving apple a content.

amazon can't sell books within its cloud music app puts it at a disadvantage. amazon has been launching work arounds. amazon has been taking other steps to lure customers like it's recent announcement of ama stone rip which gives free digital copies of cds bought from amazon in the past 15 years into the mp-3 cloud app. >> thanks. let's get to the cme group. rick santelli is in chicago with the thursday edition of the santelli exchange. >> good morning, carl. we've all gone to shopping malls and there's always a directory about every hundred yards and i like those are directories. they have a red dot that says you are here. okay. so you can navigate. here's where you are. you figure out where you want to go. but rarely do i see a directory that says you were here yesterday.

okay. because that would make no sense. if you want to know where you're going you really need to know where you are. why is this important? because we're back to this tax issue with regard to the debt ceiling potentially and revenues and we continually here about things in the past and i'll tell you this. talk to any family that's paying whatever rate they were paying in 2012 and that's the rate that makes their family work. whatever that tax rate works. it can cover their expense, buy books, scene their kids to school, put food on the table. it doesn't matter where the tax was a generation ago or three years ago because we assimilate, we're a productive capitalist society that assimilates. it on lie matters where you are. love steve liesman's presentation. it's about government spending. what i find fascinating, what we have here is on one side debt. on the other side we have

stimulus but not really. okay. boy the board is even getting excited. but debt and stimulus are the same. it just depends on which side of the check you're on. the 1.2 trillion every year in debt is basically a stimulus. so why is it so shock or why is it that to stop increasing debt that once you do the numbers go down? you know what it's like? you remember those old cars in the old days. you had stick shift. your battery was dead you pushed it to get it going. say you have to pay your buddies 20 bucks to get a push. if after 50 pushes it doesn't start maybe there's something wrong with the engine. when we contain the debt by not spending it as a stimulus the numbers are going to go down but you can't pay as you go for growth and ignore the debt that's racking up. its childish. what a horrible argument. okay. another issue real quickly is

philly fed. put this graph up. here's one of the things about you are here. one of the main reasons businesses don't want to hire because they don't want to take risk, they want to keep their cost loss. guess what that becomes "the new normal." that's why it will be ever tougher to increase employment because they are operating just fine. check the last price of the dow jones industrial average. carl, back to you. >> rick santelli in chicago. rick, thanks a lot. tweet time. treasury holding a farewell party for secretary geithner yesterday. what message should have been written on geithner's farewell cake? try running four.ning a restaurant is hard, fortunately we've got ink.

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tdd#: 1-800-345-2550 and a global specialist tdd#: 1-800-345-2550 will help you get started today. "squawk" on the tweet. secretary quite celebrating his farewell barb last night. no alcohol was served. hope he got some cake. if there was a cake what should have been written. michael writes, so how complicated does turbo tax seem now? nick writes come back when you can't stay so long. and what's up with that writes there's a $1 trillion platinum coin. you'll never get any respect. what's coming up tonight? >> we're watching intel in the after hours.

their earnings call gets under way at 5:00. and we're seeing the top right now. we have the short list of the other reconversions in the pipeline. you don't want to miss that. >> one more day to go before we get to the weekend, long weekend. see you guys later. if you're just joining us here's what you missed earlier on. >> welcome to hour three of stre "squawk on the street." >> i don't want this forever. 2% forever. >> in 2009 three to five years. so 2009 we said three to five years. >> that means you're already right it's 2013. >> you're done. >> here's what we know, here's what we don't know. we're a great company and we won't let our customers down. we're not getting that yet.

>> i look at these and it's like wow they stole the city hall, trying to understand international. this bank is in flux. it's trying to figure out what it is and when it does the stock will go higher. >> there's the opening bell. >> maybe we're going to turn out to be looking at this debt ceiling and i'm going to say it, i'll invoke shakespeare, that this can't be much ado about nothing. >> this is the federal aviation administration's job. they no longer have aviation security. security should be their primary focus and i think they dropped the ball on this one. >> banking right now steel matters more than ever. a tough day. i didn't see anything about the underlying trends that concerns me much for next year. good thursday morning. we're live here at the new york stock exchange. markets moving after a week of

inactivity. dow up 56. s&p up five. that's a fresh high from 2007. nasdaq up 11. home builders moving into the green after construction on new homes in this country rose to the highest rate in more than four years. that's the highest level since june of '08. williams sonoma one of the biggest losers. the stock getting hit with two downgrades today, goldman takes it to a neutral while raymond james takes to it market perform from strong buy. road map looks like this. citi and even bank of america in the red. is the bank rally finally over? we'll get the latest highlights from the conference calls, get a citi's shareholders take. boeing gets grounded. we'll find out what it means for the future of the company. former continental airline ceo will join us live. housing tarts hit a four year high. another sign of a possible come back in the economy. we'll find out what the cfo has

to say about the state of housing. and they ducati just had the best year ever in the u.s. north america ceo is here to tell us how they did it and how they plan to keep the good times rolling on. we'll start with financials. the sector is slightly lower as more banks report results. citi and b of a out. b and a posted fourth quarter earnings of three cents a share. kayla, good morning. >> a busy morning. citigroup kicking off his first conference call as ceo and not an easy call. the bank took higher than expected legal charges, $500 million more than analysts priced in. additionally some $800 million more was expected to released from loan loss reserves. citi on lie released $76 million. that's been keeping bank

earnings afloat. where their earnings did rise, the cfo pointed to the investment bank where like other banks debt under writing surged. much of that activity of fiscal cliff related. even with expense reductions, analysts are fng it tough to see how much profit they can post. core return on equity from both city go up and bank of america far below their peers. citigroup 2.5% and bank of america 3%. that's according to jmp securities. bank of america saw a rarity this earnings season. they saw net interest margins rise. net interest income fell leading nachlts at citi research to call numbers overall soft. b of a settled many issues but there's a long standing fight and an $8.5 million private label challenged by the s.e.c. mike mayo pressed specifically on that latter one, the ceo said

that should be wrapped up biey r by early q3. >> level of difficulty on this scale? >> extremely difficult. i think i would point to joe kernen trying to get through the bank of america release this morning. he's not sure which revenue number matches what analysts are saying. there's several numbers in there and a lot of x items. analysts are tired of one line items. it's becoming harder to predict what these banks will make and what their earnings like. >> i'll go with 8.5. i don't know about you. i'll see you later. kayla tausche at headquarters. >> all boeing 787 dream liners

have been grounded. the faa says all batteries have to show they are safe before they can resume operations. i just got get a sense from you as to what's being said, say in the offices of united today. you spent 200 million on this toy to expand your business and then you're told you can't, can't take it in the sky. you're a pilot. what does it mean? >> it's a draconian move. they haven't done it in 40 years. they did to it the dc-10 and they were wrong about that. it's cause for concern but not ground the entire fleet of airplanes that's out there. they have a million successful flight hours behind it. it's not something that would require this heavy of a measure. >> do you believe that carriers, regardless of what happens from this point on, when they make future orders are going more likely to look at an airbus than they would previously? >> i don't think so, carl.

this has got to be put into context. first of all, the battery is designed to be contained. fire and smoke. so it's especially designed for that. number two, there's six electrical generators so doesn't need the battery to operate safely. boeing builds good products. they have for many, many years and i think this is a good product. it has a bug. they will fix it. but it's got to be resolved and it's not the end of the world. >> let's talk about boeing specifically. they obviously want to ramp up the production schedule from where it is right now. that's going to be more difficult than it was yesterday, obviously. do you expect them to tell their suppliers to keep up with that projected schedule, or is this going to all come to a bit of a slow down here? >> i'm not sure they would do that right now, carl. it would be premature. this could be resolved rather quickly. i want seems to be battery defect. i don't know.

be premature not to take the rate because they have a lot of customers banking on those deliveries in outer years. >> let's talk about jim mcnerney. this project has been troubled from the start. yet the stock is awfully close to a 52 week high. we know a bunch of other things they've done right. is he at fault? now that the critics are beginning to come out and demand he be replaced, that the board start taking action is that deserved? >> that's way out of line, i suspect. it's not jim mcnerney's fault that the battery is failing. they got a good product. it's an innovative product. it's got some bugs. it's a heck of an airplane and make lot of difference to a lot of people. it's got to get resolved but doesn't warrant the ceo's removal. that's absurd. >> you're convinced that the battery as all clues indicate will end up being the problem, however you want to define that. how much of a project would it

be say to remove lithium-ion and put in something else that's less likely to cause fires. >> carl, that can happen. i doubt it will. i suspect that it's a defect in the process of building this battery because they've been used successfully as was noted earlier on other airplanes and in use today on many airplanes. this particular battery has some kind of defect. they will get to the bottom of it. there's a lot of smart people working this. you have a million hours behind you. the airplane is safe. wruft got to get this defect cured. >> finally, you know the faa administrator and ray lahood said last week trying to build some confidence in the project. the japanese are saying thing much different. the ground is a reversal in and of itself.

we had maria on last hour. she said safety is their first concern. >> it's their responsibility. none of these guys are pilots that you just mentioned so i'm not sure that they are put on it as a knowledgeable one. i believe the faa is doing a great job. they will get to the bottom of it. the certification process on this airplane is rigorous and thorough. took many years to get this plane in the air all with the faa's oversight. it's not critical. it's out of proportion today. i know it makes the headlines but this is going to be a safe airplane for a lot of people. >> if you were rated on that plane right now you would take it up on a test flight today? >> absolutely. actually i've been trying to fly one and haven't had a chance to do it. it's a great airplane. you'll loyalist. >> before we let you go, i don't know if you've seen the new logo

unveiled today first time they made a change. your thoughts? >> well, carl, you know, it's within the package not the package itself that matters. i think american needs to change as a company and be mover customer friendly. they are working towards that. the paint job is not what's at risk it's how you act. >> if it were up to aviation geeks we would have you here all hour long but we'll let you go. good to see you. >> good to see you carl. >> some stocks are on the move. >> if you're long you're feeling chipper today. kla tencor. they are upbeet about

smartphones and tablets. they like what they are seeing. asml is getting an you upgrade from buy to neutral. >> construction on new homes at a four year high. so is the industry the trigger? the latest recession finally bouncing back. the cfo of online real estate will join us. then rick santelli working on something for a little later on. >> absolutely. in about ten minutes we'll have andy. he's very outspoken. what we're going to discuss when the basement of our house is filling up with debt water is it really a good idea or the answer to raise the ceiling? we'll talk about that and much more in about ten minutes. ♪

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>> got some more signs that the housing market has regiant its footing. housing accelerated in december to its fastest pace in four years. one company looking to rebound is trulia. sean aggarwal is the chief financial officer. he joins us this morning. sean, good morning. a lot of discussion about the starts numbers. no matter what happens with revisions these numbers tend to be a little bit volatile.

it adds weight to the argument that house is back something fewer and fewer people are taking wish. >> it's quite clear the housing market is on its way to recovery and also clear that as the housing market recovers it will be multiple winners in the space. and we at trulia find ourselves to benefit from this recovery. >> give me a couple of metrics that prove that point. is it advertising from agents? is it actual consumer utilization? >> yeah. here's what we're seeing. two specific situations where we're seeing the benefit of the recovery in the housing market. first, a lot of home buyers that were previously on the sidelines are coming back into the market and using trulia to start their research. and this is leading to more home sales which is putting more commissions and dollars to real estate agents and on average real estate agents spend 10% 20% of their commissions back on marketing. and those marketing dollars are coming back, right back to

trulia. that's one. second, as you've seen, housing starts are up significantly and as these builders are putting up new communities they are trying to get in front of trulia's 25 million transaction users to market those properties and in 2012 every single one of the ten largest home builders in the country increased their media spend with trulia. so we find ourselves very well positioned and those are two specific data points that show you we'll recover. >> everybody knows the discussion you have at the kitchen table do we buy a new place, do we rent for a while. does a rub in housing strengthen housing mean rentals have to give up some of the incredible run they've had over the past couple years? >> i'll share one data point with you in response to that. we just completed a consumer survey that showed that 31% of all current renters intend to

buy a house in the next two years. so, i do believe you are going to start to see some trades as the rental market has gone up a lot. and the decision of rent versus buy is going to swing a little bit in favor of buy. and this recent data i shared points to that. >> then of course on the other hand you got to have a 30 year fix that's creeping up intelligent leadership here. we know what mortgages have done in the past couple of weeks. does the housing market have a long runway before higher mortgage rates puts pressure on sales? >> there's going be a variety of puts and calls along the way and i think it will be best to think of this as a multiyear recovery and not get too far ahead out of ourselves in response to any one metric. generally speaking the broad trends are in our favor. housing starts are up. home sales are up. home prices are up. delinquencies and foreclosures

are down. these trends will move. they will zigzag but the trend is clear they are moving up and to the right. that longer trend is quite clear. >> trulia hasn't been public all that long. is there an argument -- is the argument to the street that we're about more about more than the macro tail winds that we got? >> absolutely. absolutely. so, here is the big picture in the real estate market and the data point for you to consider. real estate agents spend $24 billion a year to market themselves. all that 24 billion, 12 billion is still being spent off line, in newspapers, print, grocery cart signs. then you ask consumers and they will tell you 89% of all consumers when they think about buying a house they go online. so there's a massive disconnect. that imbalance is starting to

correct. so these real estate dollars that are off line are starting to come online at a rapid clip and trulia is smack in the middle of that opportunity. >> interesting. we'll keep a close eye on you. thanks for coming in. come back soon. when we come back, ducati had the best year ever in the u.s. with the changing consumer does the company have to change its strategy as well? have some bikes outside of the exchange. we'll talk with ducati america when "squawk on the street" comes back. [ male announcer ] where do you turn for legal matters?

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♪ if you think that i don't know about the little tricks you play ♪ ♪ and never see you when you deliberately ♪ >> welcome back to the street. shares of disney moving higher. we're at sessions high. it's a dow component. news out of jack pacific another toy maker getting geared up to

sell disney branded toys. that will launch sometime in 2014. shares of disney are up also about 36% in a year. back to you. as republicans begin their two day retreat traders wonder if gop will challenge the debt level increase. let's get rick santelli thoughts on that. >> good morning. retreat not as in running the other way, of course, retreat as getting away with a group of your colleagues. i like to welcome in andy brenner, first time he's a guest. very outspoken. andy, like to read what you have to write and say. when it comes to continuing resolution, sequester, debt ceiling, oh, my, you have some thoughts. maybe you could run this through how you see this playing out and maybe if we're a fly on the wall at this retreat in williamsburg what might we hear from the republicans. >> thanks. what we're picking up is the

republicans are probably going to back away from challenging the actual debt ceiling in that it's just not good for them. i mean they are very concerned about the debt to gdp and the budget deficit, which are running at roughly 101% and 8 to 10%. we kind of look like spain looks right now. if anything we might be worse. but what i think happens is the republicans have two shots. march 1st is the sequester where they can challenge or what we think will happen they will wait until the march 27th continuing resolution and they are going to press the president for spending reductions which is absolutely necessary if we want to maintain at least two of our three aaa credit ratings. >> andy, i just find it amazing we now have a culture where it doesn't matter what you said a couple of years ago, even when you're the head guy running the country. we all know, raid or heard and today was the notable quotable in the "journal" when the president was a senator was a

different guy when it comes to his interpretation of voting or not voting for the debt ceiling. but i happened in my opinion agree with you on your interpretation of the republicans and the retreat. i think that principle might be a good thing. centerpiece in how i look at life. when it comes to the chess game of politics principle lose. let's switch gears a bit. you also do a lot of writing regarding europe in a noticed today that the boon, the safe harbor trade in europe traded at 160. we haven't had that for a while. do you think the funding issues of europe are in the rear view mirror and some of these yields will crop up? >> there's no question. the safety play is over our. when interest rates globally start going up there will be a lot of -- there will be a lot of problems because i still think there's a lot of leverage in the system and i think high yield and high grade have moved to unsustainable levels. for right now for the next three to six months you'll start

seeing higher rates in germany. you'll see higher rates across the board. it's hard to believe the fed is at crisis rates. when i don't see a crisis anywhere in the world. >> that's the problem with the fed's programs and all these government issues, they become subsidies, priced in the market. they almost have to maintain crisis programs. take the training wheels off maybe the public gets bruised and of course we can't have that. andy, thanks for being a guest today. carl, back to you. >> citi is in the red after reporting results. we'll hear from a shareholder that says the bank needs to be broken up. we'll get the bells across europe. we'll find out if our rally at stateside continues once they close. ♪

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european markets are closing now. >> nothing dramatic out of the continent. some news. >> a major theme in the market that's slightly higher but waiting for a new catalyst. a major theme to emerge is the way in which investors are rewarded for investing in retailers that are capable of attracting price sensitive customers. let's go the west coast of the united states. if you lived there you may have seen 700 food lion stores being revamped. that's finally bearing fruit for food lion. managed to reverse four quarters of sales decline as a result of its ability to attract those

price sensitive customers. you see that in the european markets today because food lion is owned by delhas, a belgian company. their stock is up 10% on that news from the west coast of the united states. carrefour is the second largest retailer. it too has begun to win back some price sensitive customers. it's doing well today. associated british foods actually owns a discount fashion retailer in the uk. its sales are up 25% and you see that reflected in a 4% gain on the parent company today. that major theme coming through. we should mark the fact that finally the ceo of rio tinto has been kicked out of his position in the wake of that disastrous 2007 at the top of the market purchase of $38 billion. he's going as they take another write down this time $14

billion. the stock is not moving particularly today but you can see how badly it has fared since that acquisition and the month mozambique big purchase of coal as well so that stock very much in the doldrums. one last theme to come out of europe, the spanish and italians don't bring paper to the market early to take advantage of the fact that the bond market is so buoyant because the ecb has intervened to support it. it now takes them to 9% of their total requirement for 2013 after of course yesterday the italians bought paper. they are now at 10% of their requirement for 2013. carl, back to you. >> thanks. let's get a check on energy and commodities. >> nice move in natural gas as well after that inventory report. you know the decline that we saw in storage level was bigger than the five year average, bigger than we saw last year, a bit of

a surprise to some traders and we are is going to have some bitter cold temperatures coming next week as well so all of that is helping to lift natural gas futures a bit. we're looking at momentum in the u.s., crude oil price as well. industrial commodities overall, copper as well as wti futures and that is coming after some positive data here on the economic front of the u with the jobless claims data coming in at a five year low, housing starts rising that was something that helped those industrial commodities. we're continuing to watch gold consolidate around 1685 an ounce. we're watching a lot of momentum in silver etf and that's something we'll continue to follow. bring you more on that at 1:30. >> let's bring in bob pisani where the volume is disguising how we're moving. >> we don't talk about volume. i'm not sure what it means any more.

with apologies to the technicians. the desks are quiet. our desk is quiet. what the heck? come on. folks, you can make a lot of money in a quiet take. can i point out where we're at. we're breaking out all over the place. we're at another five year high on the s&p. historic highs on the s&p mid-cap. you can make a lot of money in that index. russell 2000, a lot of money in that. and dow transports are at historic high. i get the low volume and slow desk activity but if you're in the market, you're going to be making money right now. how about the earnings situation because that's what i'm focused on. i know it's early. 55 companies have reported. we on lie have 20%. that never prevented me from making observations on what's going. there's two trends. q4 reports are not strong or weak enough to give strong direction to the market overjalg. we're drifting up here.

2013, that's what i care about right now. companies have been reluctant to say anything feign think i mean anything take a look what the banks said. these are the big guys. they would know what's going on in 2013. ceo of wells fargo, we're very well positioned for 2013. thanks very much. ceo of jpmorgan jamie dimon is optimistic. mr. moynihan, we enter 2013 strong and well positioned. best wishes for 2013 sincerely brian moynihan. i can do better than this. let me show you what i think is going on and what will matter for 2013. here's the problem. what side of the revenue growth picture are you on that determines whether you're bullish or bearish. so first quarter revenues up 2.9%. second quarter revenues up 1.2%. earnings are growing here and they are growing in q2 but no top line growth still. they are going to change these numbers into third quarter

you'll see bulls will come out raising estimates on top line growth. december home sales, december numbers here overall for the builders, pretty good numbers here on the upside many of them at new highs but those numbers starts multifamily. a lot of those multifamily. >> incredible numbers. thanks. get a check on shares of citi. the bank reporting fourth quarter earnings that missed estimates whether you include or take out the charges both on top and bottom line. the ceo owns about 300,000 shares of citi and you might know the firm has been calling for citi to be broken up. welcome back. >> thank you. >> your argument has been they are too complicated and hard to argue with you when you look at this morning's results. >> too complicated and as we've said, we co-filed with a shareholder proposal asking for

the board to look at the potential ways in which we can unlock shareholder value by potentially restructuring this business. we think the company is, as we've said, not just too big to fail but too big to manage. there's too much complexity in its current business and they need to look at how to restructure. >> you also say, though, that one of their attributes, one thing that makes city attractive is the international footprint. how do you stay international, stay global and simplify in >> we think they can do it along product lines and geography. that's one reason why we own the stock and they have a lot of good businesses within this structure including credit card business but as we look at it we think there's a better way to manage it to realize greater

value for the shareholders and take way that risk to the financial system. >> i wonder how much room you're willing to give him to run to demonstrate that this is a new era at citi if that's in fact what is it. >> sure. obviously, we were pleased to see the change. we're happy to see michael corbat at the helm. he's demonstrated some competency. we think it does need to be stepped up in terms of looking at a restructuring. i think what they really need to do is look at the reality post-dodd-frank, post all the issues over the years and say is our restructuring plan of 2009 really address all of the current issues or should we be looking at new options and what we're saying is please look at new openings, please do a little bit more thorough review of where we are now and that is going to involve, i think, a

much different plan than what was developed in the middle of the financial crisis. >> has he given you any reason to think he'll do more on that front? >> we've had conversations with the company in which they sort of gave us that they think they are executing to a plan they developed. again we think that plan is outdate sod we're saying this needs to go back to the board with senior management being instructed to look at new plans of action to try to unlock value with all that we know now. they came up with their plan of restructuring before -- think about it. it was in the middle of 2009 it was a different world. it was just after they had accepted the t.a.r.p. money and they came up with a plan that addressed really what they were required to do fix their balance sheet under t.a.r.p. there's a lot more that can be unlocked when they talk about focusing on shareholder value. >> what if they were given the green light to return some capital to shareholder in a way they have not yet.

would that quiet your criticisms. i don't want to say can you be bought. can your proposals be made to go away? >> yeah. what we're asking them to do is to consider other options. so we're not -- if they came back and said okay we've agreed, the board will take it up and we'll look at other options, including potential spinoffs and including other potential restructuring options we would be very pleased. you know, certainly being able to pay a dividend would being a great. i mean we look at every one of our holding, we look at the environmental, social governance profile and try network to help improve the company's profile on all those factors and that's really what we're trying to do at citigroup. we're saying you have a great business. there's a lot of your aspects we like. that's why we bought the stock for our clients. but there is room for improvement that we think will

improve particularly the potential impacts that could have on a company of this size having another crisis and that we need to take action now to make the business model simpler and that's what we're asking. >> our. that's something a lot of people could get behind for that very reason. that was so much for your time. >> thank you. >> ducati power is taking over the nyse. this is a shot of what's going on outside of the exchange. the luxury automaker racking up some says. we'll talk to the ceo of ducati america. and why your new year's diet could get more expensive as if dieting wasn't hard enough. "squawk on the street" will be right back. ♪

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♪ take a ride on the wild side ♪ ♪ wild side welcome back. coming up on halftime a big and some say controversial call on stocks. is the rally on banks running out of steam or taking a breather. is intel starting to show signs of life? one stock two traders, one big debate is just ahead. we'll send it to carl outside of the exchange with a little ducati action. >> ducati had a record year last year. the motorcycle company reported

an all time sales record, 21% year-over-year growth and of course was acquired by audi about eight months ago. joining us first, the ceo of ducati north america. good morning to you. welcome. first show me the bikes. that's what we want to see. what are we looking at here in >> this is a bike that is phenomenal. it's four bikes in one. >> four bikes in one. >> you sit on the bike and you choose which riding mode you prefer. you feel sporty, you put sport and zip through town. feel like touring, long term touring. >> list price? >> $22,000. >> we'll look at some of the others in a second. why was 2012 a good year in the snus >> first our product. we invested in the last few years. every year we come up with new technology products and it's appreciated especially in times

where the market is not doing so well. >> audi acquired ducati eight months ago. some people laughed. they didn't think it was a good move. is this just desserts. >> can't comment what people say. but it's been good. >> how does 2013 look? how is it shaping up given that we still have long debates about how much our consumer is willing to spend on things that are truly discretionary items, right? >> they are. you know, we don't sell commodities. clearly you don't have to buy a motorcycle. you don't have to buy a ducati but you choose to do so because we create a fantastic product. i was talking with my friends and colleagues. this year between mobile varyations we're launching 5 new motorcycles in the market. that's why we expect growth to continue strong for us in north america. >> walk me through some of these other bikes. >> this is a lower price point. this is an $18,000 bike.

it's called a diavo. it's fun. more than anything else. comfortable. easy to ride. extremely agile. and this is a bike that anyone can ride. >> over here? >> this is our flagship. this is our 1199 r. it's the pinnacle of our production. it's a $30,000 motorcycle. it's a racing inspired bike. this bike is the fastest thing you can ride. >> interesting. >> on the racetrack and in the streets if you are inlined to do so. >> we've seen on the auto sector some manufacturers like bmw tart to bring their list price down trying to compete with the ford, nissan here in the states. your into that or do you still apartment courtroom who is looking to play at the high end? >> what we try to do, we try to fulfill our mission which is bring the passion for what we do in motorcycles. that means we make better

motorcycles, higher technology, more doesn't. then we try to make a price that is right. we don't see the trend, we do our own thing and it seems to be working so far. >> looks great outside the exchange. in a perfect world we would have you get on right now and ride away. thank you for your time. just in case none of your leagues told you we're having a bit of a cold snap on the west coast, so cold that the state's fruit and vegetable crops could be frozen. jane wells tracking that story at an artichoke farm in the golden state. jane? >> they've called this a frost kissed artichoke. sort of warming up california coming out of their arctic freeze. farmers are assessing the damage. what you'll pay more for after the break.

we've talked about higher prices for beef and anything made with corn. have you looked at the prices of eventual tables lately? our jane wells has been following this story and says it could get ugly in the produce ails. she's at an artichoke farm in california. >> narrearly all the artichokes come from this area. the price increases are just beginning. what we're learning most of the news you probably heard involves california citrus industry where there's a billion dollars worth of fruit the trees and farmers spent $17 million to protect it.

the fruit looks okay. the real story is vegetables. most of what goes into your salad comes from southern california and arizona and prices are going through the roof already because of the freeze. the usda says romaine lettuce prices are three times higher than they were this time last year to as much as $32 a carton. that's compared to $11.50. broccoli has tripled. red cabbage is up 175% and spinach up 150%. it comes in like this from the freeze. >> she runs a chain of restaurants in california. her chopped is a salad our top selling item and since her menus are printed she can't raise those prices. for example you won't see a any asparagus for her prima

vera. >> we anticipated spinach. this is a baby spinach. so the baby spinach, the growers cut the whole crop this time as baby spinach. we have that. they have having an issue growing to it full term which is that clean and washed bag spinach that you see in the grocery stores. >> chiquita package cost should move higher but should pass along the cost on the food services sides meaning restaurants but have to eat some of those costs on the retail side. and why farmers in this part of the business say a freeze can be good for profits. they don't get crop insurance. had they have a cold snap and short supply they jack up the prices. >> fascinating. interesting you say it one day we see it in the produce aisle the next day. jane wells in california. let's get a market flash courtney regan is back in

headquarters. >> new skin. a company that makes these anti-ageing products. you can see here shares are up 10%. the company will top wall street expectations when it reports it's earnings on february 6th. shares up 10%. >> keep those tweets coming. treasury secretary celebrated his farewell barb. it was not a wild affair. >> they didn't serve alcohol. >> apparently no alcohol was served. let's hope he at least got some cake. speaking of which we want to know what should have been written on his farewell cake. tweept us. we got your answers coming up next. come within the kitchen. help

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we got clients in today. [ male announcer ] save on ground shipping at fedex office. . time for squawk on the tweet. the treasury secretary celebrated his farewell bash last night but no alcohol was served. we hope he got a cake. what message should have been

written. show me the money. hot under the collar, sweat on the brow and cool under fire. and wall street fireman. from the treasury department to actual treasuries, got a final thought from rick santelli on that. >> i know what i would write on the cake. forever indebted. listen, when it comes to the markets hopefully we're showing a three month chart of tens. the right side of the chart has a pattern that looks like it's the fifth wave of a five weave pattern. that means audiotape round 2% should be coming but might be a great place for resistance. boom yields popped 160. there's a feeling that things are getting more calm in europe. just don't look at the economic outlook. >> given the data we saw today, philly fed aside, housie ing sts good. do you think those numbers will alter the outlook for the fed